Oil Stocks Are Nearing New Heights. It’s Time to Be Careful.


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Oil stocks are approaching levels not seen in years as the price of the fuel surges and shows little sign of backing down. That is a danger signal.

The Energy Select Sector SPDR Fund (ticker: XLE) gained as much as 2.6% Monday before dipping into the red as the broader market sold off more sharply. The fund, home to oil producers like Chevron (CVX) and oil-services companies like Halliburton (HAL), is up 31% for the year. Monday, the fund’s share price touched just above $77, approaching $78.91, a closing level it hasn’t reached…